Lease Contract and Termination: Things You Need to Know
Are you one of those individuals who get overwhelmed when given papers of the lease contract? Reading all the content may sound tedious but understanding them is highly essential. This is necessary so that you can protect your expenses and rights. Both landlords and tenants must agree and sign some legal papers, including the lease contract, when dealing with rental properties.
What Is a Lease Contract?
Simply defined, a lease agreement is a legal paper that proves and recognizes the agreement between the tenant and the landlord. In this paper, the landlord agrees to rent out a certain property (villa, house, or apartment) in exchange for fees from the tenant/s. The terms of the agreement must be stated on the paper, and both parties should abide by the terms.
There will be an amount to be paid when any of the parties fail to follow the terms. Essential inclusion in the contract are security deposit, amount of rent, agreed contract time, pet allowance, speculations on modifications, and lease termination.
Important Terms in the Lease Contract Explained
Below are some of the critical terms that you need to know to understand a lease contract better:
- Landlord: Also termed as “Lessor” and pertains to the one who rents out the property; the rent can be either paid quarterly or monthly
- Tenant: Also known as “Lessee,” this refers to the one who rents the property
- Premises: Refers to the basement, condo, apartment, or house for rent; in Hanoi, the premises are primarily houses, apartments, or villas for rent
- Term: Refers to the period a tenant has the right to stay on the premises
- Deposit and Payment: Pertains to the amount of money equivalent to one month of rent; this amount will be refunded in full upon the contract’s expiration, with all the bills paid
What Are Needed for Early Lease Termination?
If you are not satisfied with the rented property, you may terminate the lease contract early. Before meeting your landlords to tell the decision, the tenant should prepare two important papers: termination of the lease contract and early lease termination letter.
Generally, an early lease termination is described as a written announcement about the early leaving of the tenant. The landlord is expected to inform the tenant about their decision 1-2 months ahead (may vary depending on the parties’ agreement) to still give back their security deposit.
There are several cases that are related to lease contract termination:
- A lessor should pay back the advanced rent and deposit if the lessee announces their leaving 30 days before.
- The lessor will have to pay only the rent for the next months. There are cases when the lessor agrees to have a contractual term regarding the payment of the deposit only when the lessee notifies, leaving 30 days ahead. You can ask your real estate agent to ask the lessor if such an arrangement can be included in the contract before signing.
- There are times the landlord is the one who decides to have an early contract termination; it may be due to another purpose for the property. In this case, the lessor will need to return the deposit, a fine amounting to one-month rent, and the rent for the coming month(s).
How to Terminate the Lease Contract Without Penalties
Some issues arise when a tenant decides to terminate the contract and finds out that there are penalties and charges to be paid. That is why it is critical to know how you can have a good lease contract and a reliable agreement:
- Read and review the contract, especially on the section about payment and termination.
- Consider and agree to a termination offer before the term expires.
- Have open communication with the landlord to prevent misunderstanding and clarify concerns regarding legal matters.
- Seek professional legal advice to handle any legal contract.
Whenever you are renting a property, make sure to have a lease contract. Make sure that you understand its inclusion and terms. You can seek professional help from a reliable real estate agent and a lawyer to avoid future issues.
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